Frequently Asked Questions

ACOSS is the Australian Council of Social Service.

ACOSS recognises the right of all Australians to opportunity, justice and equity.

The Australian Council of Social Service is a national advocate for action to reduce poverty and inequality and the peak body for the community services sector in Australia. Our vision is for a fair, inclusive and sustainable Australia where all individuals and communities can participate in and benefit from social and economic life.

Established in 1956, ACOSS aims to reduce poverty and inequality by:

• Leading and supporting initiatives within the community services and welfare sector and acts as an independent non-party political voice.
• By drawing on the direct experiences of people affected by poverty and inequality and the expertise of its diverse member base, we develop and promote socially and economically responsible public policy and action by government, community and business.

Find out more on the ACOSS website at www.acoss.org.au

UNSW Sydney is the University of New South Wales, Sydney.

UNSW Sydney is one of Australia’s leading research and teaching universities. UNSW takes pride in the broad range and high quality of their teaching programs, which gain strength and currency from research activities, partnerships such as the Poverty and Inequality partnership, strong industry links and international nature; UNSW has strong regional and global engagement.

Find out more at the university’s website: https://www.unsw.edu.au

The data in this website is mostly sourced from the Australian Bureau of Statistics (ABS) in their Survey of Income and Housing. 

This survey is run by the ABS every two years, and every six years is integrated with the Household Expenditure Survey.  The purpose of the survey is to collect information on where people get their income from, what people’s households are worth, their housing status, household characteristics and more.

The survey asks a sample of the population across all areas of the country questions from the same questionnaire. In the most recent survey, almost 14,000 dwellings were contacted.

You can view the survey questionnaire and find out more information here. 

Other information sources include the Organisation for Economic Cooperation and Development (OECD) statistics database.

Poverty is the lack of money or resources for one’s needs. Everybody should have enough money or resources for the basic needs of life – enough food for oneself and for one’s family; a roof over one’s head; to cover clothing, education and health expenses. Find out more on our poverty page. 

Inequality means the unequal distribution within society of income, wealth and goods. In this website we measure inequality in two ways: income inequality and wealth inequality. Find out more on our inequality page. 

This website takes housing costs into account when calculating income. We talk about income before or after housing costs are taken into account.

We mostly use after housing costs, because housing is the largest fixed cost for most household budgets. This means that those families with lower housing costs, especially those who own their homes outright, are able to have a higher standard of living than those on the same income who still have housing costs.

The Global Financial Crisis lasted from mid-2007 to early 2009, and was a time of huge stress in banking systems and financial markets around the world. Australia survived it relatively lightly, but did experience a period of slowed economic growth, a sharp increase in the unemployment rate, and some fear and uncertainty about the economy. The reason that Australia fared much better than other countries was partly due to our lending structure and financial regulation; to our exposure to countries that fared better rather than worse during the crisis; and to our large policy response to ensure that the economy did not suffer a major downturn. Find out more at: https://www.rba.gov.au/education/resources/explainers/the-global-financial-crisis.html

The reference person for each household in the Survey of Income and Housing which provides the data for most of this website is chosen by the Australian Bureau of Statistics, by applying its selection criteria to all household members aged 15 years and over. The selection criteria are applied in the order listed, below, until a single appropriate reference person is identified:

• the person with the highest tenure when ranked as follows: owner without a mortgage, owner with a mortgage, renter, other tenure;
• one of the partners in a registered or de facto marriage, with dependent children;
• one of the partners in a registered or de facto marriage, without dependent children;
• a lone parent with dependent children;
• the person with the highest income;
• the eldest person.

Median income is the income level at which half the population have lower incomes and half have higher incomes.

The rate of poverty refers to the risk of poverty for a particular group of the population, for instance sole parents or couples with children.

The profile of poverty refers to the share of each group within the total population of people in poverty.

In this example, the rate of poverty for sole parent families is 32% while the rate of poverty for couples with children is 12%. However, because there are more couples with children than there are sole parents overall, the profile of poverty shows that 28% of people in poverty are couples with children, compared with 18% sole parents.

Social security is the blanket term for a system in place to provide individuals with a minimum adequate standard of living. In Australia, that system is made up of income support payments and family payments, along with concession cards available to people receiving income support, people on low incomes, and people over a certain age.

The social security in Australia is legislated through the Social Security Act 1991, the Social Security (Administration) Act 1999, A New Tax System (Family Assistance) Act 1999, and A New Tax System (Family Assistance) (Administration) Act 1999. It is administered by the Department of Human Services through Centrelink; and social security policy is spread between a range of other Government departments such as the Department of Employment, Skills, Small and Family Business and the Department of Human Services.

Indexation in this website refers to the adjustment of social security payments based on changes to another value. It is done to adjust for the effects of inflation and in the costs of living. JobSeeker is currently indexed to the Consumer Price Index (CPI), while pensions are indexed to either the CPI or the Pensioner and Beneficiary Living Cost Index (PBLCI), whichever is higher.

An income support payment is a payment from the Government for adults  who have insufficient income from paid employment or savings. It includes payments such as JobSeeker Allowance or Age Pension. It is distinct from supplementary payments such as Family Tax Benefit. The need for income support is assessed by means testing.

Deprivation: Looking at the essential items people are missing out on.

Poverty lines: A level of income, below which people are regarded as living in poverty. This website uses two poverty lines – 50% of median income (minus housing costs) and 60% of median income (minus housing costs), whereby people living below these incomes are regarded as living in poverty.

Relative poverty: This is when poverty is measured against something that can change. It means that poverty is measured against a standard that is unacceptably low in a given point in time. For example, poverty lines of a percentage of median income – as median income changes depending on the income standards at that point in time.

Absolute poverty: This is when a household or person does not have enough income for even a basic acceptable standard of living, or to meet basic living needs. The threshold for absolute poverty varies between developed and developing countries.

Extreme poverty: When people are living on an income below the international poverty line set by the World Bank of $1.90 a day.

Poverty gap: The average difference between the poverty line and the disposable income of households living below that poverty line.

The poverty gap is the difference between the average incomes of those below the poverty line and the poverty line itself.

A few different versions of the gap are used in this website, depending on whetehr the gap is measured in actual or equivalent income, whether the averaging is only over people on low incomes, or across the whole population, and whether the gap is measured using individuals or households.

The common variations are:

Equivalised gap: The average gap among those on low incomes, calculated by individuals.

Gap as percentage of poverty line: If the equivalised gap is divided by the equivalised poverty line.

Poverty gap index: This is the result of multiplying the gap as percentage of poverty line by the poverty rate. this can be used in a similar way to the poverty rate in order to comparethe well-being of different population groups.

The Australian Bureau of Statistics surveys people with disability in their Survey of Income and Housing, which provides the majority of data for this website. In that survey, a person has a disability if they report that they have a limitation, restriction or impairment that has lasted, or is likely to last, for at least six months; and which restricts everyday activities. This is then further split into those with and without a core activity limitation – a profound, severe or moderate limitation in core activities, where core activites are defined as communication, mobility or self-care.

The list of limitations, restrictions or impairments includes:

• • • • loss of sight (not corrected by glasses or contact lenses)
      • loss of hearing where communication is restricted, or an aid to assist with, or substitute for, hearing is used
      • speech difficulties
      • shortness of breath or breathing difficulties causing restriction
      • chronic or recurrent pain or discomfort causing restriction
      • blackouts, seizures, or loss of consciousness
      • difficulty learning or understanding
      • incomplete use of arms or fingers
      • difficulty gripping or holding things
      • incomplete use of feet or legs
      • nervous or emotional condition causing restriction
      • restriction in physical activities or in doing physical work
      • disfigurement or deformity
      • mental illness or condition requiring help or supervision
      • memory problems or periods of confusion causing restriction
      • social or behavioural difficulties causing restriction
      • long-term effects of head injury, stroke or other acquired brain injury causing restriction
      • receiving treatment or medication for any other long-term conditions or ailments and still being restricted
      • any other long-term conditions resulting in a restriction.

Find out more on the Australian Bureau of Statistics website at https://www.abs.gov.au/ausstats/[email protected]/Lookup/4430.0Glossary12015

The Organisation for Economic Cooperation and Development, the OECD, is an international economic organisation that has 36 members. It was founded in 1961 in order to stimulate economy and trade. Most member countries are developed countries.

The OECD equivalence scale is a way of accounting for household size when judging household income. While each new member of a household means that the needs of that household are increased, this increase is not proportional. For instance, when a new person joins a household of one, the electricity and water usage is not doubled, but it increases. The OECD equivalence scale works by assigning a value of 1 to the first member of a household, 0.7 to each additional adult, and 0.5 to each child. Find out more. 

The Gini coefficient is a measure of inequality using a range in which 0 means that everyone has the same amount of income or wealth; and 1 means that all income or wealth belongs to one person. A reduction in the Gini therefore represents a reduction in inequality. This single measure is useful for international comparisons, but it has limitations when it comes to describing the shape of the distribution (for example whether there is more inequality between low and middle-income households or between middle and high-income households) and explaining the main causes of inequality. For those purposes, we need more detailed information on how income is shared across different groups in the population.

In order to calculate income inequality in Australia, individuals are divided into five equal groups according to disposable income of their household after that income is adjusted up or down to take account of household size (equivalised). These groups are also known as ‘quintiles’.

Pre 2007 measure: This refers to the definition of income that was in use prior to 2007 by the Australian Bureau of Statistics (ABS), and which was also included in later surveys.

Post 2007 measure: This refers to the definition of income that was brought into use in 2007 by the Australian Bureau of Statistics (ABS). This definition was broadened to include forms of income not previously measured, such as fringe benefits, irregular overtime and bonuses, resulting in increased estimates of median incomes, and, consequentially, poverty rates.

Household income is all income that is received by the household or by members of that household. This includes income from:

• Employment;
• Income support and family payments;
• Income from own business;
• Investment income; and
• Private transfers (eg superannuation, child support).

Gross income is the sum total of all of these sources of income.

Disposable household income is the sum total of all of these sources of income minus income tax, the Medicare levy, and the Medicare levy surcharge. This is also known as net or after tax income.

Average incomes shown here are average incomes for households (rather than individual incomes) and are “unequivalised” (not adjusted for household size).

Net wealth is made up of the residential home plus other real estate and real assets, for example home contents and vehicle; plus financial assets, for example  loans to others, bonds, superannuation, bank accounts, shares, trusts, business assets; less debts, eg mortgage debt and student loans.

In order to calculate wealth inequality in Australia, individuals are divided into five equal groups according to household wealth. Unlike income groups, an equivalence scale is not applied to adjust household wealth, because wealth held by a household will generally be used to finance consumption in the future when the size and makeup of the household may be different.

The ‘concentration index’ used on this website is a measure of the association between a sub-component of household wealth and overall wealth. It shows the extent to which the sub-component is held by households who have higher overall wealth.